Hi Raquel. Excellent question.

You’ll get differing opinions on this. I’d say it largely depends how locked in you are to that property timeframe.

If you definitely need the money in 5-8 years, and there’s no possible workaround, then yeah I would lean towards either investing less into the market, or going for a lower risk ETF like you’ve mentioned.

The thing to consider is that while 5-8 years is a decent timeframe, you’ll be putting money in during that period too. So the money you put in now has 5-8 years, but the money you put in later will only have 2-4 years… so your timeframe for each investment is smaller as it goes on.

If you’re flexible on timeframe – like you could stretch to 8-10 yrs – then I would invest more aggressively, basically in line with your long term holdings.

One way to approach this is investing for the first few years – say 4 years – then leaving it and building cash for the second 4 years. That gives the invested money longer to perform, while reducing risk for the remainder of the time period. Hope that makes sense.